USD/CAD drops to session low at 1.2875 ahead of US releases

Recovery in crude oil prices maintained bid tone around the Canadian Dollar, with the USD/CAD pair now extending its slide further below 1.2900 handle to currently trade near session low of 1.2880.

Despite of this week's volatile moves in crude oil the pair remained well offered and the selling pressure intensified after BOC on Wednesday left its monetary policy unchanged but revised its forecasts for inflation higher. 

The pair is now trading lower for fourth consecutive day, erasing all of its gains recorded in the previous week as the US Dollar remained on the back-foot despite of Thursday's upbeat weekly jobless claims and PPI data. 

Next in focus would be US inflation report and retail sales data for the month of June, which would be accompanied by Empire State manufacturing index and followed by industrial production data and the preliminary reading of UoM consumer sentiment. Canadian economic calendar features the release of manufacturing sales data for the month of May.

Technical levels to watch

Weakness below Thursday's low support near 1.2860 is likely to get extended towards a short-term ascending trend-line support near 1.2820-15 region, which if broken seems to open room for further near-term depreciating move for the pair.

On the flip side, strong bullish momentum above 1.2900 handle now seems to confront strong resistance near 50-day SMA near 1.2950 region. Above 50-day SMA, leading to strength beyond 100-day SMA resistance near 1.2975 region, the pair seems to gain further traction that could assist the pair back towards 1.3100 strong resistance.